The amount by which aggregate expenditures exceed those associated with the full-employment level of domestic output can best be described as
A)a recessionary expenditure gap.
B)an inflationary expenditure gap.
C)the multiplier.
D)the average propensity to save.

Question

Quizplus · Accepted Answer

Aggregate expenditures that exceed those associated with the full-employment level of domestic output will lead to an inflationary expenditure gap, as there is more money chasing after a limited supply of goods and services, leading to higher prices.

The Amount by Which Aggregate Expenditures Exceed Those Associated with the Full-Employment